Practice Issues and Contracting for Environmental Attributes in Green Energy Procurement and Certification

Corporate renewable energy procurement must satisfy minimum financial metrics, but the driving motivation is the renewable energy, carbon footprint-reducing, sustainability goal-enhancing function of these transactions. This free webinar aimed at attorneys and legal practices in renewable energy will focus on defining power purchase agreement terms related to renewable energy certificates, and explore in depth how the Green-e® certification program helps buyers get the level of green they expect. The speakers will also consider how the transactions address carbon offsets and other future or potential environmental attributes, along with other terms designed to ensure renewable energy projects support, and do not undermine, buyers’ broader environmental and social priorities.

Peter Mostow, a partner at Wilson Sonsini Goodrich & Rosati (WSGR) joins M. Alexia de Pottere-Smith, General Counsel at Bay Area energy NGO Center for Resource Solutions in discussing the emerging themes around contracting for—and certification of—energy procurements in today’s volatile market, while introducing new best practices around resource eligibility.

Transcript

1. PRACTICE ISSUES &
   CONTRACTING
   FOR ENVIRONMENTAL ATTRIBUTES IN
   GREEN ENERGY PROCUREMENT AND
   CERTIFICATION
   Peter Mostow
   PARTNER,
   WILSON SONSINI GOODRICH & ROSATI
   M. Alexia de Pottere-Smith
   GENERAL COUNSEL,
   CENTER FOR RESOURCE SOLUTIONS
   

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2. M
   Speakers
   PAGE
   2
   © 2020 Center for Resource Solutions. All rights reserved.
   M. Alexia de Pottere-Smith
   General Counsel,
   Center for Resource Solutions
   Peter Mostow
   Partner, Wilson Sonsini Goodrich & Rosati
   

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3. Defining “RECs”
   • “RECs” means certificates, credits, green tags, or other transferable
   indicia associated with the generation of one (1) MWh of Energy from a
   wind or solar energy source by a wind or solar energy facility in the
   United States, created under a renewable energy, emission reduction or
   other reporting program adopted by a governmental authority, certified
   under the Green-e® Energy Standard for Canada and the United States
   Version 3.2, or successor version. RECs include Project RECs and
   Replacement RECs.
   • “Replacement REC” means RECs generated by any wind or solar
   energy facility located in the United States and interconnected in
   ERCOT that is not the Facility.
   Sample PPA Clauses
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   3
   © 2020 Center for Resource Solutions. All rights reserved.
   

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4. Defining “Energy Attributes”
   • “Environmental Attribute” shall mean any emissions, air quality or
   other environmental attribute, aspect, characteristic, claim, credit,
   benefit, reduction, offset or allowance, howsoever entitled or
   designated, resulting from, attributable to or associated with the
   Generated Quantity and/or the Facility that is related to the Facility’s
   benefits to the environment …. Environmental Attributes include carbon
   credits, portfolio credits, RECs, emissions allowances, environmental air
   quality credits and emissions reduction credits, offsets and allowances….
   Environmental Attributes do not include federal, state and local tax
   credits, grants or other tax Incentives, any other Incentives, or Capacity
   Attributes.
   Sample PPA Clauses
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   4
   © 2020 Center for Resource Solutions. All rights reserved.
   

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5. Defining Other Key Terms
   • “Incentives” shall mean production and investment tax credits based on
   energy production from any portion of the Facility and any other tax benefits or
   other financial incentives, whether federal, state or other, resulting from
   construction, ownership, operation, maintenance or other use of the Facility,
   including Production Tax Credits and similar tax credits.
   • “Capacity Attributes” shall mean the gross revenues with respect to any
   current or future defined characteristic (including the ability to generate at a
   given capacity level, provide Ancillary Services, and ramp up or ramp down at a
   given rate), certificate, tag, credit, flexibility, or dispatchability attribute, whether
   general in nature or specific as to the location or any other attribute of the
   Facility, intended to value any aspect of the capacity of the Facility to produce
   energy, including any accounting construct, or any other measure by the
   ERCOT, the FERC, or any other Governmental Authority.
   Sample PPA Clauses
   PAGE
   5
   © 2020 Center for Resource Solutions. All rights reserved.
   

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6. Defining “RECs”
   • “RECs” means certificates, credits, green tags, or other transferable
   indicia associated with the generation of one (1) MWh of Energy from a
   wind or solar energy source by a wind or solar energy facility in the
   United States, created under a renewable energy, emission reduction or
   other reporting program adopted by a governmental authority,
   certified under the Green-e® Energy Standard for Canada and the
   United States Version 3.2, or successor version. RECs include Project
   RECs and Replacement RECs.
   • “Replacement REC” means RECs generated by any wind or solar
   energy facility located in the United States and interconnected in
   ERCOT that is not the Facility.
   Sample PPA Clauses
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   6
   © 2020 Center for Resource Solutions. All rights reserved.
   

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7. PAGE
   7
   • Established by CRS 20 years ago
   • Global leader in clean energy
   certification
   • Consumer protection for
   voluntary renewable energy
   purchases
   • Over 62 million MWh in retail
   transactions certified in 2018,
   enough to power over half of
   U.S. households for a month.
   Green-e® Certification
   © 2020 Center for Resource Solutions. All rights reserved.
   

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9. Available at https://www.green-e.org/ppa-language
   • Prohibition on “eligible”, “certifiable,” etc.
   • Notes CRS intellectual property rights
   • Provides clauses addressing:
   • Applicable Standard definition
   • Green-e® Certification
   • Green-e® Verification and Audit Costs
   CRS Recommend PPA Clauses
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   © 2020 Center for Resource Solutions. All rights reserved.
   

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10. PAGE
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    Designed to “help marketers avoid making
    environmental claims that mislead
    consumers”
    • First issued in 1992 and were revised in 1996,
    1998, and 2012
    • Provide guidance on: “1) general principles that
    apply to all environmental marketing claims; 2)
    how consumers are likely to interpret particular
    claims and how marketers can substantiate
    these claims; and 3) how marketers can qualify
    their claims to avoid deceiving consumers.”
    • 2012 changes included new guidance on
    marketers’ use of product certifications and
    seals of approval, claims about materials and
    energy sources that are “renewable,” and
    “carbon offset” claims.
    U.S. FTC Green Guides
    © 2020 Center for Resource Solutions. All rights reserved.
    

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11. 2012 Revisions
    • Avoid making unqualified renewable energy claims based on energy
    derived from fossil fuels; such claims permissible only if marketers
    purchase RECs to match their energy use
    • Marketers need substantiation for all their express and reasonably
    implied claims or must clearly and prominently qualify their renewable
    energy claims
    • No unqualified claims unless all, or virtually all, of the significant
    manufacturing processes involved in making a product are powered
    with renewable energy or non-renewable energy matched with RECs
    • Term ‘‘hosting’’ is deceptive when a marketer generates renewable
    power but has sold all of the renewable attributes of that power
    Green Guides on RE/RECs
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    11
    © 2020 Center for Resource Solutions. All rights reserved.
    

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12. PAGE
    12
    © 2020 Center for Resource Solutions. All rights reserved.
    

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13. © 2020 Center for Resource Solutions. All rights reserved.
    Contact.
    M. Alexia de Pottere-Smith
    GENERAL COUNSEL
    CENTER FOR RESOURCE SOLUTIONS
    alexia.dps@resource-solutions.org
    415.561.2100
    Peter Mostow
    PARTNER
    WILSON SONSINI
    pmostow@wsgr.com
    206.883.2541
    www.resource-solutions.org
    

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